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ME0401 - ECONOMICS ANDPRINCIPLES OF

MANAGEMENT

PURPOSETo become familiarized about Engineering Economics and Principles of

Management.

INSTRUCTIONAL OBJECTIVES

The course will enable the students to become familiar withThe different engineering economic principles and strategiesPrinciples of organizational managementBehaviour of human at organizations with modern management concept

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Unit - I ENGINEERING ECONOMICS

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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INTRODUCTION

INTRODUCTIONECONOMICSSCOPE AND DEFINITIONIMPORTANCE OF ECONOMICS IN ENGINEERINGECONOMIC OPTIMIZATION

DEMAND AND REVENUE ANALYSISLAW OF DEMANDDEMAND FORECASTINGMETHODS OF DEMAND FORECASTINGDEMAND CURVESFACTORS AFFECTING DEMANDDEMAND ELASTICITYPRODUCTION ANALYSISSIMPLE PROBLEMS

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ECONOMICS

economics is t*e science o c*oice

Ecn!ic" i" t#$ "t%&' ( #) "ci$ti$" %"$ "c*+c$resources to produce va!ua!e goods and services anddistriute t*em among di,erent individua!s.

En,in$$+in, $cn!ic"/ previous!" 0no%n as $n,in$$+in,

$cn!'/ is a suset o $cn!ic"or app!icationto $n,in$$+in,proects. En,in$$+"see0 so!utions to pro!ems/and t*e $cn!icviai!it" o eac* potentia! so!ution is norma!!"considered a!ong %it* t*e tec*nica! aspects.'unctiona! ctivit" -!anning/ production materia! management/p!ant engineering/ transport/ action management etc.

"pe o Decision apita! udget a!!ocation/ ma0e or u"decisions/ rep!acement/ proect eva!uation etc.

7Ecn!ic"is t*e stud" o *o% peop!e and societ" c*oose to emp!o"

"c*+c$resources t*at cou!d *ave *t$+n*ti.$uses in order toproduce various commodities and to distriute t*em or consumption/no% or in t*e uture/ 89rom -au! Samue!son and :i!!iam ;ord*aus/ Economics/ 12t* Ed./)cor0/ 1(&5

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SCOPE AND DEFINITION

:*" s*ou!d I stud" economics?

$et us count t*e %a"s.

)an" stud" economics to *e!p t*em get a good o.

Some peop!e ee! t*e" s*ou!d understand more deep!" %*at!ies e*ind reports on in@ ation and unemp!o"ment.

Arpeop!e %ant to understand %*at 0inds o po!icies mig*t s!o%

g!oa! %armingor

%*at it means to sa" an i-od is 7made in *ina.9 :*"s*ou!d I stud" economics? $et us count t*e %a"s.

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IMPORTANCE OF ECONOMICS IN ENGINEERINGEconomics eBp!ores t*e e*avior o t*e fnancia! mar0ets/inc!uding interest rates/ eBc*ange rates/ and stoc0 prices.

C *e suect eBamines t*e reasons %*" some peop!e orcountries *ave *ig* incomes %*i!e ot*ers are poor it goeson to ana!"ze %a"s t*at povert" can e reduced %it*out*arming t*e econom".

C It studies usiness c"c!est*e @uctuations in credit/unemp!o"ment/ and in@ationa!ong %it* po!icies tomoderate t*em.

C Economics studies internationa! trade and fnance and t*e

impacts o g!oa!ization/ and it particu!ar!" eBamines t*et*orn" issues invo!ved in opening up orders to ree trade.

C It as0s *o% government po!icies can e used to pursueimportant goa!s suc* as rapid economic gro%t*/ eFcient use

o resources/ u!! emp!o"ment/ price stai!it"/ and a airdistriution o income.

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ECONOMIC OPTIMIZATION

Ecn!ic $/ci$nc' +$%i+$" t#*t *n $cn!'produce t*e *ig*est comination o Guantit" andGua!it" o goods and services given its tec*no!og"and scarce resources. n econom" is producing eF cient!" %*en no individua!Hs economic %e!are can e

improved un!ess someone e!se is made %orse o,.

Ecn!ic Oti!i2*tinit is t*e est use o avai!a!e scarce resources insuc* a %a" t*at t*e satisaction !eve! ismaBimum..so %e can sa" minimum usage oresources and maBimum !eve! o output.

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DEMAND AND REVENUE ANALYSISD$!*n&3 T#$ )iin,n$"" *n& *iit' ( u"ers to purc*asedi,erent Guantities oa good at di,erent prices during a specifc time period.

D$!*n& Sc#$&%$3 T#$ n%!$+ic* t*%*tin o t*e Guantit"demanded o a goodt di,erent prices t*e numerica! representation o t*e !a% odemand.

Demand curve:*e grap*ica! representation o t*e demandsc*edu!e.

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*e +ic$ $*"ticit' ( &$!*n& 5"!$ti!$" "i!' ca!!ed +ic$$*"ticit' 6 !$*"%+$" #) !%c# t*eGuantit" demanded o a goodc*anges %*en its price c*anges. *e precise defnition o pricee!asticit" is t*e percentage c*ange in Guantit" demanded divided "t*e percentage c*ange in price.

*e price e!asticities o demand or individua! goods are

determined " t*e economic c*aracteristics o demand. -ricee!asticities tend to e *ig*er %*en t*e goods are !uBuries/ %*ensustitutes are avai!a!e/ and %*en consumers *ave more time toadust t*eir e*avior. " contrast/ e!asticities are !o%er ornecessities/ or goods %it* e% sustitutes/ and or t*e s*ort run.

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*e mar0et demand curve is t*e sum o individua! demands at eac*price.'igure s*o%s *o% to add individua! dd demand curves horizontally toget t*e mar0et DD demand curve.

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LAW OF DEMAND

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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DEMAND FORECASTING

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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METHODS OF DEMAND FORECASTING

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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DEMAND CURVES

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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FACTORS AFFECTING DEMAND

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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DEMAND ELASTICITY

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand

12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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PRODUCTION ANALYSIS

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand

12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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PRODUCTION ANALYSIS

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand

12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.

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SIMPLE PROBLEMS

1. Introduction2. Economics3. Scope and Defnition4. Importance o Economics in Engineering5. Economic optimization

6. Demand and Revenue na!"sis#. $a% o Demand&. Demand 'orecasting(. )et*ods o Demand 'orecasting1+. Demand curves11. 'actors a,ecting Demand

12. Demand E!asticit"13. -roduction na!"sis14. Simp!e pro!ems.